MA373 S11 Test 1-1

# MA373 S11 Test 1-1 - 1 Wang Corporation invests 10 million...

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1. Wang Corporation invests 10 million today to build a new factory. Thereafter, Wang expects to receive the following profits from the factory: End of Year Profits 1 - 1 million 2 2 million 3 4 million 4 4 million 5 4 million 6 2 million The factory will be obsolete and torn down at the end of 6 years. Determine the net present value of this project at an annual effective interest rate of 7%.

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2. While Audrey is in college, her grandparents are depositing 300 at the beginning of each month into an account. They will make a total of 48 payments. The account earns an annual effective interest rate of 12%. How much will Audrey have in the account at the end of 48 months?
3. Liyana will pay 4000 to each of Hamizah and Mohd today. Mohd will pay 5000 to each of Hamizah and Liyana at the end of 2 years. Hamizah will pay 5000 to Liyana at the end of 4 years. Hamizah will also pay 6000 to Mohd at the end of 4 years. Using the bottom line approach, determine Hamizah’s annual yield rate on this arrangement.

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4. Mike bought a new high definition television for 2000.
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MA373 S11 Test 1-1 - 1 Wang Corporation invests 10 million...

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